Spectrum Allocation in India II Administrative Allocation

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Context:

The government has decided to allocate satellite communication spectrum on an administrative basis.

Airwaves or Spectrum

Airwaves or Spectrum are a range of electromagnetic frequencies called radio waves, which are used for communications by a variety of services and industries.

The range of radio spectrum varies from 1 Hz to 3000 GHz (3 THz).

The Electromagnetic spectrum includes a variety of other waves including X-ray waves, infrared waves and light waves.

The electromagnetic spectrum is divided according to the frequency of these waves, which are measured in Hertz (i.e. waves per second).

Airwaves are typically referred to in terms of:

kilohertz (or kHz), a thousand waves per second
megahertz (or MHz), a million waves per second
gigahertz (or GHz), a billion of waves per second

Satellite Spectrum

Satellite spectrum refers to the range within the radio frequencies which are used for satellite communications ( Ex. Communicating with ground stations and satellites).

This spectrum is used by service providers for satellite broadcasting, communication satellite, navigation, Earth observation and weather satellite services.

Regulation of Satellite spectrum

The United Nations Agency(UN) agency, the International Telecommunications Union (ITU), oversees the global allocation of these frequencies.

ITU divides the radio spectrum into different frequency bands, each with subbands for different services.

Radiofrequency bands

The Radiofrequency means the number of times the underlying wave oscillates per second.

It is measured in units of Hertz (Hz) and 1 Hz is equal to one cycle per second.

This unit is used for all electromagnetic spectrum - including gamma rays, x-rays, visible light, microwaves, and radio waves.

The higher the frequency, the faster the waves appear to move, and the more data can be transmitted per second.

However, higher frequencies reduce the wavelengths, which is the length between the start and end of each wave. This leads to a reduction in the strength of the signal over a distance and an increased risk of signal interference.

L-BAND FREQUENCY:

It is the lowest frequency spectrum band that we use in our services, and is typically defined as ranging between 1 GHz and 2 GHz.

It can penetrate obstacles like storm clouds or heavy rain due to shorter wavelengths making it extremely reliable for sending and receiving signals.

S-BAND FREQUENCY:

It typically ranges between 2 GHz and 4 GHz. It is commonly used for satellite communications, including to support television, radio broadcasting, radar systems and some satellite navigation applications due to longer wavelengths.

C-band:

Its frequency ranges between 4-8 GHz. It is commonly used for satellite TV broadcasting and data communications.

X-band:

It has a frequency range of 8-12 GHz. They are used primarily by the military for radar and communication.

Ku-band and Ka-band:

Their range is from 12-18 GHz and Ka-band has a range from 26-40 GHz. It is used for satellite television, internet, and high-throughput data transmission.

Auction vs administrative allocation of spectrum

The allocation of spectrum takes place through two main methods:

Auctions
Administrative assignments.

Comparison of Auction and Administrative allocation of spectrum

Auctions	Administrative assignments.
An auction is a competitive bidding process where the government sells spectrum licences to the highest bidder.	It involves the government directly assigning spectrum licences to selected entities without a bidding process.
This method is designed to allocate scarce resources efficiently and transparently.	This method is often used when auctions are impractical or less beneficial.
Participants submit bids for spectrum licences and the highest bid wins the licence.	The government sets eligibility criteria and grants licences accordingly.
Auctions are favoured for their market efficiency, as the spectrum is allocated to those who value it most to ensure optimal usage.	Administrative allocation typically involves a nominal fee that covers administrative costs rather than reflecting the full market value of the spectrum.
They are more transparent than administrative methods, reducing the potential for favouritism or corruption.	This method provides flexibility and is particularly useful for sectors where competition is less relevant, such as national security or public interest services.
This method is primarily used for commercial telecommunications spectrum, especially in competitive markets where multiple entities vie for access.	Administrative allocation is commonly used for government-related services or specialised sectors where demand is low or sharing frequencies among multiple users is feasible. It can also encourage the development of emerging industries, like satellite communications, by offering easier access to necessary resources.

History of spectrum auction in India

India was among the early adopters of spectrum auctions beginning auctions in 1991.

It was 1994 that India conducted the first spectrum auction for 900MHz radio frequency.

With this emergence of the first spectrum in India comes Bharat Sanchar Nigam Limited (BSNL) and Mahanagar Telephone Nigam Limited(MTNL).

The auctions were continued in the years 1997,2000 and 2001. The last highest bidding was conducted for 1800MHz in 2001.

Subsequent auctioning process did not yield adequate revenue for the government. Ther scams such as 2G spectrum allocation scam led to further criticism of the auctioning process.

During March 2015 auctions the government has earned a revenue of ₹ 82,000 crore ($11 billion) from spectrum allocation.

In 2021 auction bids yielded Rupees 65,789 cr only by selling 965MHz of the spectrum.

Spectrum allocation controversies in India

India’s approach to spectrum allocation is controversial due to the shift from auction-based allocations to administrative assignments.

In the past many scandals such as the 2G spectrum scam made the allocation process even more controversial.

The 2G scam involved allocating licences on a first-come, first-served basis. This process involved massive financial losses. It led to loss of Rs 30,984 crore for the government and a loss of Rs 1.76 trillion in the allocation of 122 2G licences to telecom companies.

After the 2G scam , In 2012, the Supreme Court mandated auctions as the preferred method for spectrum allocation.

However, the Telecommunications Act 2023 provided a non-auction route for the allocation of satellite spectrum.

Satellite spectrum allocation decision

The government has decided that satellite communication (satcom) spectrum will be allocated through administrative means rather than the auction route.

This development underscores the growing competition for satellite services in the Indian market, which is projected to grow at 36 per cent annually and reach $1.9 billion by 2030.

Why has the government chosen an administrative route?

Satellite spectrum is worldwide in nature and has no national geographical boundaries, in contrast to terrestrial spectrum, which is utilised for mobile communications.
The spectrum used by satellites is shared. The spectrum cannot be charged separately if it is shared.
As an ITU signatory, India chose to adopt the global best practices, as the majority of countries use the administrative route for allocation of spectrum.

Way ahead

Transparent Auction Processes:

In the 2021 spectrum auction, the government sold spectrum worth ₹77,814 crores which is approximately $10.4 billion. This shows the potential for revenue generation through transparent and competitive bidding.

Countries like Germany have successfully used transparent auction processes to allocate 5G spectrum and generated substantial revenue.

India could adopt similar strategies to enhance auction transparency and competitiveness.

Collaboration with Stakeholders

The Indian telecom sector comprises over 1.2 billion subscribers and multiple operators. There is a need for coordinated efforts to ensure spectrum is allocated effectively.

Telecom Regulatory Authority of India (TRAI), can bring together operators, policymakers, and technology experts to align on spectrum needs and priorities.

Promoting Innovation

A PwC report estimates an additional contribution of ₹3.9 trillion ($53 billion) to India’s GDP by 2025 through better spectrum allocation. Investing in research and development for new technologies can enhance spectral efficiency.

Public Consultation

Increased engagement can lead to more informed spectrum policies. This practice leads to well-rounded policies that address both consumer and industry needs effectively.

Important article for reference

The Telecom Act of 2023

Sources:

BUSINESS STANDARD

INMARSAT